Interview | Adrian Volintiru, CEO, Romgaz

12 August 2019

Romgaz is the largest natural gas producer and the main natural gas supplier in Romania. It is a joint stock company whose majority shareholder is the Romanian State owning a 70% stake. The company celebrates 110 years of natural gas history in Romania this year and is planning diversification.

Romgaz is close to completing construction of Iernut Power Plant, one of the few modern pieces of energy infrastructure in Romania since the 1960s-1970s. What were the circumstances surrounding this investment?

We took over the Iernut plant in 2013, as part of an enforcement process due to non-payment of certain debts. Nobody was particularly happy with the solution at the time, but it seemed like the only way to recover the losses. Rather than looking at it as a burden, a cost center, we focused on options to turn it into a profitable one, and also decided early on that we would be using only the best technology available. We are happy to see the construction is progressing very well, and we expect that it will be up and running in the first trimester of 2020.

This experience has really opened our appetite to develop new projects, especially since there are few companies in Romania that are able to undertake such large investments. We chose to develop the 500 MWh gas based power plant in Mintia, and we are in the process of acquiring the land, which will be under exclusive ownership of Romgaz. We aim to start construction in 2020 and we are in talks with potential partners for several other construction plans, because there is great need, as well as opportunity for this in Romania.

You have recently announced your plans to expand into renewable energy. Why have you chosen this sector as one of the strategic directions for the future?

We considered the fact that Romania is still an importer of energy, and also the fact that it is not yet truly diversified. The largest share of energy presently comes from hydro, and a small part of it is gas-based. In the coming years over 220 MWh of coal will have to be discarded, because of environmental norms in place, and this will create a gap in the market that we are happy to fill.

A higher share of renewable energy is also beneficial for balancing consumption quantities. If you have a diversified mix, the various sources can complement or replace each other when necessary. Finally, we believe strongly that clean energy is the energy of the future.

Gas has been at the core of Romgaz throughout its long existence. How do you envision the role of gas within the company going forward?

Many generations will come after us, so we should make sure to use resources as mindfully as possible. Gas is a fossil fuel that will be exhausted over time, and in Romania the quality of methane gas is among the highest in the world (99% pure methane), even more reason to be mindful about how we extract value from it. For instance we can develop further into petrochemistry, in fact as a company we are already making steps in this direction.

Legislation is a big challenge of course, to work in this market one needs a great deal of agility, in order to adapt with ease to sudden changes and without complaining too much. GEO 114/2018 served us well in this sense - we were just deciding whether to expand into renewable energy at the time, and this reinforced our feeling that is was the right move.

What are the key objectives Romgaz will be pursuing in the next two-three years?

We have a market study underway that is assessing opportunities in the petrochemical arena, a very interesting option for us. Other priorities are the expansion into renewable energy, developing our offshore capacity and extending internationally in a calculated but persistent manner. Specifically, we are in contact already with the National Gas Company in Poland, and also in incipient talks with SOCAR in Azerbaijan. We will see in the next period which opportunities carry the most value.